The Problem Faced by BizRate - Essay Example

The Background BizRate has gained substantial lead in the market acting as an information intermediary with regard to the feedback. The very different approach followed by the company gave them creative edge in comparison with their market counterparts. The main arena of BizRate was the collection of customer feedbacks through their net based surveys. Though they didn’t serve as a rating service enabling their own expertise, these customer feed backs helped to rate the participating companies accordingly. Differently from other service and product raters BizRate gained advantage from the customers as it provided customized and categorized data according to the criteria as required by the customers. One another importance service provided by BizRate was research on the market performance of the companies. The web portal made use of the customized survey forms filed by the customers to tabulate the research findings. These research findings acquired much market demand as it helped the companies to analyse their market performance and strategies. In October 1999, BizRate released a new website which had added features like merchandising and referral services. The company along with its listed merchants gained remarkably huge response for this innovation. The pace of market involvement and revenue generation was accelerated through this creative effort. This prophesied the scope that the company would have in ecommerce. However a concentration on ecommerce would mean that the company will have to drop out its research services as managing both effectively would not be possible within the capacity of the company. BizRate is thus in a very important stage where they are to take a crucial management decision pertaining to the primary focus of the company. The problem The key problem that exists in this management scenario is that BizRate needs to change their portfolio as an ecommerce entity. Given the advantage that the company gained after lodging newer features like merchandising and referral services, the company and its management has felt the scope that its holds as a ecommerce company. There had been substantial increase in the revenue as well, after the implementation of the new features. However so as to concentrate more on ecommerce, the company will have to completely drop out the research services for which it was renowned for. As the manpower had attained optimal exploration for the sake of research services, it was not possible for the company to equally concentrate on both research and ecommerce with the existing facilities. The company had to fix their primary focus on either of the business operations. Additional Information Required The case study does not provide data pertaining to the cost of the manpower involved and other overhead costs. This information is required to analyze some of the possible alternatives. Though the data on revenue increase due to the added features along with rough estimates on profit from the new business is provided, more profit projections will be required to properly assess the situation. Possible Alternatives & Consequences Capacity building One possible solution for the managerial problem faced by BizRate is the capacity building of the company both in terms of human resources and other required infrastructures. BizRate currently is having 225 employees, which was low if the company has to concentrate both on ecommerce and research. The increase in staff strength would allow the company to concentrate equally on both realms of business. Along with this an increase in other capacities including the infrastructure would be required to cope up with the increased work load. So as to analyze the feasibility of this alternative, more information on the overhead cost and manpower cost would be required. However in general it can be concluded that this alternative will include substantial capital. The expected revenue is also not available to cross check it with the increase in recurring and capital cost. The management of the abrupt increase in the number of staff would also demand subsequent improvement in the management capacity. Focus on current business strategies The company till date has made substantial impact in the market through its research and deliverance of customer reports. The company has become one of the leaders in providing market research and reflecting the customer responses. Concentrating on this would keep the company on the safer side as it involves minimum of market risk. Focusing on research would mean that the company will have to drop out the plan of getting into the ecommerce business. This would limit the growth possibilities of the company. This should be read together with the fact that the initiatives made by the companies in the line of ecommerce have gained tremendous market response. Moreover the scalability of the research operation is questionable. This would mean that BizRate will have to change its focus from research sooner or later. Focus on ecommerce Innovations like merchandising and referral services have confirmed the scope of ecommerce as a viable growth option for the company. BizRate will have to commit its full energy and resources in ecommerce so that its takes maximum benefit from this operation. Though actual figures on the expected returns are not provided, with reference to improvement in the market response it can be assumed that the company will have better growth options in this arena. Focusing on ecommerce would mean that BizRate will have to completely dropout its conventional activities like deliverance of market research reports and customer analysis report. It would change the face of the company from a Market Research firm to that of a complete commercial entity. The luxury of the market identity will be lost and BizRate will have to compete with other market giants. The Solution With the limited information available, the solution for the problem faced by BizRate is that it must redefine its focus as an ecommerce entity. This would open up the window for immense growth opportunities. As far as the market risk in concerned, the previous record of the organization would help in this context. This option would help BizRate to strive across the challenge of limited future and scalability of its conventional research activity. However an extensive financial and market scope analysis is recommended before the implementation of this option. General Conclusions The general conclusion made from the case study is that every market entity must regularly update their focus with reference to the differing market situations. This rethinking process is essential for the survival of the company in the modern corporate competition. However while initiating any change; the success of the concerned company would depend on the perseverance to maintain market identity. Read More